WELFARE AND PENSION FUNDS v. Moser, 93 C 377.

• Decision Date: 19 October 1994
• Docket Number: No. 93 C 377.,93 C 377.
• Citation: 867 F. Supp. 665
• Parties: SUBURBAN TEAMSTERS OF NORTHERN ILLINOIS WELFARE & PENSION FUNDS, Plaintiff, v. Paul MOSER, d/b/a Paul Moser Trucking, Defendant.
• Court: U.S. District Court — Northern District of Illinois

867 F. Supp. 665

SUBURBAN TEAMSTERS OF NORTHERN ILLINOIS WELFARE & PENSION FUNDS, Plaintiff, v. Paul MOSER, d/b/a Paul Moser Trucking, Defendant.

No. 93 C 377.

United States District Court, N.D. Illinois, Eastern Division.

October 19, 1994.

COPYRIGHT MATERIAL OMITTED

Hugh B. Arnold, John Joseph Toomey, Arnold & Kadjan, Chicago, IL, for plaintiff.

Gerard C. Smetana, Law Offices of Gerard C. Smetana, Chicago, IL, for defendant.

MEMORANDUM OPINION AND ORDER

LINDBERG, District Judge.

Plaintiff, the Suburban Teamsters of Northern Illinois Welfare and Pension Funds ("Welfare and Pension Funds" or "Funds"), has filed a declaratory judgment action against defendant Paul Moser, d/b/a Paul Moser Trucking ("Moser"), seeking a determination of the rights and other legal relations of the parties arising under sections 502 and 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 USC §§ 1132, 1145, and under section 301 of the Labor Management Relations Act, 29 USC § 185. The Welfare and Pension Funds are ERISA funds established pursuant to written collective bargaining agreements providing benefits to all persons performing covered work under the agreements. Steven English ("English") was an employee of Moser Trucking and a member of Teamsters Local 673. Pursuant to the collective bargaining agreement between Teamsters Local 673 and Moser Trucking, titled "DuPage County Construction Agreement," Moser made contributions on English's behalf to the Funds.

On November 27, 1991, English was involved in an accident while backing a semi-tractor out of Moser Trucking's driveway. Two days later, English visited his doctor complaining of an injury to his elbow. The physician treated English and released him to return to work on Monday, December 2, 1991. English continued to work for Moser two to three days a week during the winter months hauling fuel oil. On February 22, 1992, Moser fired English for not returning money advanced to him for an overweight violation. English did not file a grievance with the union to contest the discharge.

On March 2, 1992, approximately one week after he was terminated, English filed a worker's compensation claim alleging that he was disabled due to the injuries sustained in the November accident. English and Moser settled the worker's compensation claim approximately five months later on August 24, 1992.

On May 2, 1992, the Funds audited Moser and determined that he owed contributions on behalf of English for the period December 1991 through February 1992. Fund Manager James W. Ewing sent a letter to Moser, informing him of the contributions due for this period and requesting payment.

After Moser failed to pay the delinquent contributions, the Funds filed this action on January 21, 1993. Plaintiff seeks a declaration that Moser owes $3,223.00 in contributions to the Funds on behalf of English. The disputed contributions break down as follows: Moser allegedly owes $607.00 in contributions to the welfare fund and $66.00 in contributions to the pension fund for the period of English's employment from December 2, 1991 to February 22, 1992; Moser also allegedly owes $2,300.00 in contributions to the welfare fund and $250.00 in contributions to the pension fund for the twenty-five week period of the workers' compensation claim, March 2, 1992 through August 24, 1992.

Defendant Moser has moved for summary judgment on the basis that it has no obligation to make contributions to the Funds for the period of English's workers' compensation claim because English was not a "regular employee ... absent because of occupational illness or injury." English was not a "regular employee" or "absent" during this period because he had been terminated for cause unrelated to the alleged injury. In addition, Moser maintains it owes no contributions for the period December 1991 through February 1992 as English was not performing work covered under the terms of the agreement.

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FRCP 56(c). Rule 56 further provides that a party opposing a properly supported motion for summary judgment "may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986).

The parties agree that the facts are not disputed. The issues relating to interpretation of the collective bargaining agreement present questions of law which the court can properly resolve on summary judgment.

Section 515 of ERISA requires employers to make pension and welfare fund contributions as promised in collective bargaining agreements to the extent the terms of the agreement are not inconsistent with law. Central States Pension Fund v. Hartlage Truck, 991 F.2d 1357, 1360 (7th Cir. 1993). Section 515 provides:

Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.

29 USC § 1145. The Welfare and Pension Funds are not parties to the collective bargaining agreements but are third-party beneficiaries. Central States v. Gerber Truck, 870 F.2d 1148, 1151 (7th Cir.1989). The Funds are authorized to pursue collection under 29 USC § 1132(a)(3)(B)(ii), which provides that a civil action may be brought by a participant, beneficiary or fiduciary of an ERISA plan to enforce the terms of the plan.

The court must enforce the terms of the collective bargaining agreements when those terms are unambiguous. Hartlage Truck, 991 F.2d at 1361, citing Central States v. Independent Fruit & Produce Co., 919 F.2d 1343, 1349 (8th Cir.1990). In order to properly resolve a dispute over contractual terms on a motion for summary judgment, a trial court must determine whether the language of the agreement is ambiguous. See Hickey v. A.E. Staley Mfg., 995 F.2d 1385, 1389 (7th Cir.1993). "A term is ambiguous if it is subject to reasonable alternative interpretations." Id, quoting Taylor v. Continental Group, 933 F.2d 1227, 1232 (3rd Cir. 1991).

Plaintiff contends that section 9.1(B) of the agreement delegates responsibility to the Funds' Board of Trustees to resolve any disputes as to contributions owed by Moser:

Any disagreement with respect to the eligibility, time and method of payments, payments during periods of employee illness or disability, method of enforcement of payment and related matters shall be determined by such Trustees.

The Funds maintain that since the trustees have discretion to resolve these disputes, their decision must be reviewed under an arbitrary and capricious standard of review. See Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989).

Despite the language of section 9.1(B), defendant Moser argues the agreement does not give the trustees any authority (much less discretionary authority) to interpret or construe the terms of the agreement. Moser contends the agreement "leaves to the parties the right to interpret the Agreement where the Agreement is ambiguous and provides no room for the Agreement to be interpreted by third parties contrary to the Agreement's own terms." (Reply at 2) (emphasis in original).

In Firestone, the Supreme Court set forth the appropriate standard of review for section 1132(a)(1)(B) actions challenging benefit eligibility determinations:

Consistent with established principles of trust law, we hold that a denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.

Under Firestone, a district court must review a plan administrator's decision to deny benefits de novo unless the ERISA plan gives the administrator discretion to determine a claimant's eligibility or to construe the terms of the plan. If the ERISA plan gives the administrator such discretionary authority, the standard of review is arbitrary and capricious. See Nichol v. Pullman Standard, Inc., 889 F.2d 115, 118 (7th Cir.1989); Fletcher v. Kroger Co., 942 F.2d 1137, 1139 (7th Cir.1991).

The Supreme Court in Firestone specifically limited its discussion of the appropriate standard of review to section 1132(a)(1)(B) actions. The Court did not comment on the applicability of the de novo or arbitrary and capricious standards of review to other ERISA actions:

The discussion which follows is limited to the appropriate standard of review in § 1132(a)(1)(B) actions challenging denials of benefits based on plan interpretations. We express no view as to the appropriate standard of review for actions under other remedial provisions of ERISA.

This court has found no Seventh Circuit or district court cases where a de novo or arbitrary and capricious standard of review was applied in section 515 actions to recover delinquent employer contributions. See Indiana State Council of Roofers v. Adams Roofing Co., 753 F.2d 561, 564 (7th Cir.1985); Central States Pension Fund v. Hartlage Truck, 991 F.2d 1357, 1361-62 (7th Cir.1993); Central States Pension Fund v. Tank Transport, 779 F.Supp. 947 (N.D.Ill. 1991). However, none of the agreements at issue in these cases specifically delegated the responsibility to resolve disputes over employer contributions to the fund trustees as in this case.

In Indiana State Council, 753 F.2d at 564, the Seventh Circuit held that...